Unilever and Smith’s pay penalties for misleading use of school canteen labelling in supermarkets

The major food companies – Unilever and The Smith’s Snackfood Company – have each been fined AUD $10, 800 for the misleading use of ‘school canteen approved’ labelling on supermarket products.

The companies have confirmed the logos in question will no longer be used on packaging.

Unilever

An infringement notice was issued by the Australian Competition and Consumer Commission (ACCC) to Unilever for its 10-pack of Rainbow Paddle Pop ice creams which used a logo stating “School Canteen Approved”. The logo also included a tick symbol.

Smith’s

The Smith’s Snackfood Company received an infringement notice for a logo used on its Sakata Paws Pizza Rick Snacks which included the words “Meets School Canteen Guidelines”. The logo had a picture of a sandwich and apple.

Both products included disclaimers that they met the ‘amber’ school canteen criteria (or the ‘select carefully’ criteria). The disclaimers were however deemed by the ACCC to be small and not sufficiently prominent enough to correct any misleading representation as they were on different sides of the packaging to the logos.

ACCC action initiated after CHOICE report

The ACCC took action over the logos after it was brought to its attention by the consumer advocacy group, CHOICE.

As reported by Australian Food News in October 2015, CHOICE had criticised a number of supermarket-sold foods saying food companies were misleading consumers by using industry-made canteen certifications.

Responding to the news of the penalties, CHOICE welcomed the ACCC action.

“School canteen approved logos are essentially acting as health halos for processed, packaged foods, so the decision to fine Unilever and Smith’s is welcome news,” said CHOICE Head of Communications Tom Godfrey.

The penalties issued to Unilever and to The Smith’s Food Company was a fixed amount. Australian Food News notes that the ACCC had legal power to initiate court proceedings against the companies. However, it choose only to serve an infringement notice in both cases. The standard fine for a company served with an infringement notice usually faces a set penalty of AUD $10, 800. That amount is a relatively low amount for a food company compared with cases brought by the ACCC for misrepresentation where the fines can run into many hundreds of thousands of dollars.

“The ACCC believes both companies were using logos to claim that these products were a healthy option for school canteens to supply to children, when they were not,” ACCC Commissioner Sarah Court said.

Health Claims are next, warns ACCC

“School canteen managers, parents and caregivers rely upon product packaging and labelling when choosing healthy snacks for children. The ACCC is currently examining consumer protection issues around ensuring that the health claims made by large businesses are accurate and will not mislead consumers,” Ms Court said.

Unilever response

Unilever issued the following statement to Australian Food News:

“We are committed to providing clear, easy-to-understand information about our products. We have cooperated fully with the ACCC and will be removing the School Canteen Approved logo from our Paddle Pop core range to address their concerns.”

The Smith’s Snackfood Company response

The Smith’s Food Company provided the following statement to Australian Food News:

“The Smith’s Snackfood Company is committed to food labelling transparency and providing consumers with the information they need in a way which is clear and unambiguous. We stand by the integrity of the labelling and marketing of our Sakata Paws Pizza Supreme Rice Snack products.

While Sakata Paws Pizza Supreme Rice Snacks meet the current Amber classification under the New South Wales, Queensland, Victoria and South Australia School Canteen Guidelines, we previously began implementing voluntary packaging changes to remove reference to the School Canteen Guidelines prior to receiving any infringement notice from the ACCC. We anticipate new packaging to arrive on store shelves later this year.”